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Is Hartford Healthcare Fund HLS IB (HBGHX) a Strong Mutual Fund Pick Right Now?

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If you have been looking for Mutual Fund Equity Report funds, it would not be wise to start your search with Hartford Healthcare Fund HLS IB (HBGHX - Free Report) . HBGHX bears a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.

History of Fund/Manager

HBGHX finds itself in the Hartford family, based out of Woodbury, MN. Hartford Healthcare Fund HLS IB debuted in October of 2002. Since then, HBGHX has accumulated assets of about $30.28 million, according to the most recently available information. The fund's current manager is a team of investment professionals.

Performance

Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 7.38%, and it sits in the middle third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 6.7%, which places it in the bottom third during this time-frame.

When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. Compared to the category average of 18.31%, the standard deviation of HBGHX over the past three years is 17.63%. Over the past 5 years, the standard deviation of the fund is 17.55% compared to the category average of 16.93%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 0.79, the fund is likely to be less volatile than the market average. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. Over the past 5 years, the fund has a negative alpha of -0.38. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Holdings

Exploring the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is mostly on equities that are traded in the United States.

The mutual fund currently has 75.58% of its holdings in stocks, with an average market capitalization of $158.27 billion. The fund has the heaviest exposure to the following market sectors:

  • Health
  • Finance
  • Other
Turnover is 38%, which means, on average, the fund makes fewer trades than its comparable peers.

Expenses

Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, HBGHX is a no load fund. It has an expense ratio of 1.16% compared to the category average of 1.29%. From a cost perspective, HBGHX is actually cheaper than its peers.

Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.

Bottom Line

Overall, Hartford Healthcare Fund HLS IB ( HBGHX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.

For additional information on the Mutual Fund Equity Report area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into HBGHX too for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.


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